From knuckledusters in Parliament to One Nation

On Friday 4 August 1939, while members of the Queensland State Labor Caucus were having their morning meeting in a room in Parliament House in Brisbane, a group of 37 men, calling themselves the ‘Social Justice League’, entered, making threats, carrying batons, coils of barbed wire, hammers, knuckledusters and other tools. Barricading themselves in, they demanded a 40-hour week, lower taxes and tolls, unemployment relief, cooperative ownership of primary industry, and a ‘stabilised price’ for farmers.

It was, unsurprisingly, a dramatic scene. ‘I refuse to be instructed by you’, Premier William Forgan Smith told the group’s leader, and went on, in his strong Scottish accent, to lecture the men. ‘This is a display of Fascism and I will not countenance such an outrage in Queensland. We refuse to be intimidated by you, individually or collectively, and I ask you to withdraw’. When a leader (perhaps Richard Newton Boorman), claimed to be a rebel in the Jacobite mould, making reference to the 1746 battle of Culloden, the premier told him that if he was a rebel he ‘would have to take the consequences of being one’. In the excitement, one Minister slipped out to call the police, who soon arrived, and took everyone to jail.

Who were the League of Social Justice? If it was, as the premier accused, a ‘display of Fascism’, it was a particularly amateurish and inept one – hardly a March on Rome, or even a Beer Hall Putsch. Indeed, their demands weren’t particularly different to anything a Labor government might have itself proposed in the 1930s, and at his trial one of the men, Nigel Bonsey, described himself as a ‘Rooseveltian Radical’. To get the answers, we’ve got to know a bit about the strange history of Social Credit, an economic cause with eventual influence in Australia over the League of Rights and other far right organisations, as well as an enduring legacy in our most recently elected federal Senate.

CH Douglas was a British engineer who, in the aftermath of the First World War, developed his own personal theory of the economy and society, which he published as Social Credit (1924). It’s difficult to summarise and a bit weird – like all heterodox political economy – but in short, it holds that through controlling national credit, the government should intervene to bring consumers’ purchasing power up to the level of production, the imbalance in which was the cause of all economic ills. Though an intellectual dead end, it became immensely popular among certain groups on the fringes of mainstream politics, particularly in Canada, where a Social Credit party even won provincial government in Alberta. ‘Social Credit’ became, for a decade or two, a small political crusade of earnest enthusiasts.

Some of Douglas’s ideas came from older critiques of capitalism familiar to socialists the world over. He genuinely hated poverty. ‘Social Credit’ – putting the wellbeing of families and consumers first – sat quite well alongside the Catholic social teaching of Rerum Novarum (1891) for example, and the well-known mutualist, distributist intellectual traditions of cooperativism. Other parts came from his background as an engineer; like the technocrats of the United States’ progressive era, he believed the economy was a machine like any other, and, with the right expertise and non-political leadership, could be optimised (not necessarily democratically) to benefit everyone.

Nor was there was nothing unusual about loathing for the banks in the 1930s. In our age, now that there’s no alternative to capitalism, we forget just what a smorgasbord of alternatives there apparently were in the early twentieth century. Social Credit was even a minor strand in ALP politics of the Depression and Lang split, at least until the party settled into an orthodox, Keynesian, social democracy. Prime Minister Chifley and his peers kept their hatred of banks with a fury borne out of memory of both the 1930s and 1890s.

Unfortunately, the worst of Douglas’s approach to understanding economic ills came from a famously poisonous text. The Protocols of the Elders of Zion proposed a terrific conspiracy in which Jewish leaders were controlling interest, lending, debt, and by proxy, the whole economic system, and thus were the source of all global ills. If books can have moral qualities, it must be one of the most genuinely evil texts ever published. Its message found fertile soil in the context of a Social Credit movement fixated on money, interest, credit, and debt. Douglas himself, by the end of his life, could only explain the failure of Social Credit as a Jewish plot.

Anyone who has spent time on the internet knows the type: the commenter or blog author with a few strongly held beliefs to do with the monetary system and finance, the foundations of our economic system, its ills, and usually a very definite set of prescriptions to solve them. Maybe it’s the fractional reserve system, or the Reserve Bank, or the Gold Standard, or banks in general – but usually it’s not long before the Freemasons come up, or Agenda 21, mind control, Communism, vaccines and fluoride, halal certification, or NASA covering up the truth about Phobos. Perhaps strange occult byways are where things end up, but the fixations often start with thinking about money. Where does it come from? What is interest, anyway? What’s its relationship to democracy? They’re all questions with disturbing pasts.

In Australia and New Zealand, the crusading banner of Social Credit was carried through the postwar boom years of social democracy by a man called Eric Butler, the founder of the League of Rights. Spotters and connoisseurs of the far right are familiar with this outfit, though probably not the rest of us; it was a fringe outfit with influence (in other right-wing circles, and in parts of the small ‘ugly’ faction of the NSW Liberal Party) far beyond its actual numbers. It mainly advocated for then-unfashionable right-wing causes, like those of Rhodesia and South Africa under apartheid, against multicultural policy in Australia through the 1970s, against the Australia Card in the 1980s, and in the 1990s, against gun control and Native Title.

Like the even weirder Citizen’s Electoral Council, and the profoundly strange American figure Lyndon LaRouche, whose platform encompasses conspiracy theories about Queen Elizabeth’s drug running and some very esoteric occult philosophy to do with Beethoven, the League of Rights has kept Social Credit’s basic intellectual inheritance, and passed it on to a new generation of right-wing bodies. Which is why, in the 1990s, a National Credit Authority – a basic Social Credit plank – was part of the platform of the One Nation Party. This Party, which will be represented in the new federal Senate, retains a social-credit policy of investment by federal fiat, rather than by borrowing. Malcolm Roberts, who will probably represent Queensland, has even been repudiated by Andrew Bolt, no stranger to fringe politics, for his views on Jewish banking families.

It’s very hard to completely kill old ideas, particularly when their contexts keep recurring in new forms. While the orthodox view of the 2008 Global Financial Crisis was that, far from being a conspiracy, the global economy simply lacked anybody with an overall understanding, let alone regulation or control, it has also seen a resurgence of some very old unorthodox monetary/conspiracy ideas. There’s a peculiar irony that militancy for ‘social justice’, which nowadays refers to political opposition to all forms of discrimination, particularly relating to gender, sexuality, race, ability, religion, and so on, should be also the inheritance of the far right, which now opposes all these movements. Inheritances shared between children, after all, don’t always divide happily.

The success of far-right parties at the most recent election has been cause to question whether supporters are motivated primarily by racism or by material economic concerns. I would add the question of the real intellectual debts we owe to previous generations, even if we’re unaware of them. Certainly the people involved didn’t disappear into obscurity. One leader of the raid, George Henry Gray, even shrugged off the notoriety of the raid to himself enter Parliament, winning Capricornia for Labor, becoming for years an advocate for Northern Queensland independent statehood.

It’s important to understand what goes on in the far right not just in terms of sordid racism, genuine material grievance, and tedious op-ed culture war, but also in terms of the intellectual heritage of old, weird, partially forgotten movements.

Image: ‘Members of the League of Social Justice who raided Parliament House appear in the Brisbane Police Court, 1939’, via State Library of Queensland.

Comments

Being directed to your article on the League of Social Justice, Social Credit, C.H. Douglas and the Australian League of Rights, I must say I was disappointed that you did not mention the Australian League of Rights’ website.

You could follow the histories of the Social Credit and League of Rights movements for at least the last fifty years as their journals over that period of time are there for all to read for themselves.
As to the Social Credit movement, there are a number of websites that focus on Social Credit.

I had heard of the League of Social Justice incident in Queensland’s Parliament House from older folk. I understand one of the fellows involved was a priest of the Anglican Church and another a member of the famous Rackemann cricketing family – hardly terrorists in the 21st century mould!

You do say “To get the answers, we’ve got to know a bit about the strange history of Social Credit, an economic cause with eventual influence in Australia over the League of Rights and other far right organisations, as well as an enduring legacy in our most recently elected federal Senate.”

Maybe you need to do some more research on at least one the claims that both the Social Credit movement and the League of Rights write about. That is, that “banks create money out of thin air”. That the private Banking system has taken unto itself the power to monetise the nation’s real wealth.

Go to the Bank of England’s Working Paper No. 529
Banks are not intermediaries of loanable funds — and why this matters
Zoltan Jakab and Michael Kumhof May 2015

You wrote “Social Credit (1924). It’s difficult to summarise and a bit weird – like all heterodox political economy – but in short, it holds that through controlling national credit, the government should intervene to bring consumers’ purchasing power up to the level of production, the imbalance in which was the cause of all economic ills. Though an intellectual dead end, it became immensely popular among certain groups on the fringes of mainstream politics.” I have never heard a more incorrect description of social credit. The fact that you tie it to socialism is equally repugnant. From a philosophical perspective, Douglas described social credit as “Practical Christianity” in in that sense you rightly aligned it with the teachings of the Catholic Church – and every other church that advocates the teachings of Jesus for that matter.

Douglas also said “Systems were made for man. Man was not made for systems.” That line of reasoning dies not come through in what you wrote.

So here is the bottom line; what part of “If it costs a dollar to bring to market but only 50 cents is paid out in wages, how is it mathematically possible to pay for more than half of that production? don’t you understand? There is not a single business that ever was, is or will pay out as much in wages, earnings and/or dividends as it charges in the price of its goods and services. It logically follows that our present economic system has a fundamental accounting flaw. There is a chronic shortage of money and an innate ability to meet what should be the very purpose of production.

And just what is that purpose? Is it not to deliver production to consumers in the most efficient, cost-effective and timely manner possible? Betty Luks was right. You are not well informed. Do yourself a favor. Pick up a copy of Oliver Heydorn’s book “Social Credit Economics” and get your facts strait. Then you can write a follow-up article where you set the record straight. Otherwise, you become another of whom it would be said “You can’t fix stupid.”

Social Credit has been called the Third Resolvent Factor to overcome the impossible Left-Right Duality. It has also been called “practical Christianity”–having been discovered to be compatible with basic Christian principles. Its founder, British engineer Major Clifford Hugh Douglas did not “design” Social Credit to be Christian in nature but by entirely inductive investigation made his discovery about the innate non- self-liquidating nature of the existing price and costing system as it operates under the debt mode of money creation administered by the banking system.

Social Credit does not advocate placement of all money creation in the hands of the State. It does recommend that the vast and increasing amounts of money created by the banks as consumer loans should be replaced by consumer credit issued without being recorded as debt, in the form of inalienable National Dividends to all citizens and payments to all retailers enabling them to charge Compensated (falling) Prices at point of sale.

The new consumer “credits” would merely be drawn from a properly constructed National Credit Account, being an actuarily determined evaluation of all national resources which if used for production might result in the creation of prices. This National Credit Account would always be growing by the amount of additional new real capital assets.

The Social Credit analysis and advocacy are primarily concerned with financial accountancy–the creation and cancellation of production costs and the rates of flows of prices relative to the rates of flows of effective cost-cancelling consumer incomes.

Social Credit cannot be placed in the usual Left-Right political spectrum. It is quite different and has the objective of instituting a distributive economic system to replace the existing acquisitive economy. It does not seek to place production in the hands of the State but rather to ensure that the results of association in the economic sphere flow smoothly and fully to the population at large.

Social Credit does not seek “full-employment” but upholds the Leisure State. As such it approves maximum efficiency in production achieved via science, automation and artificial intelligence.